The War on Medicaid Is Moving to the States

In the early 1960s, as the Johnson administration worked to enact Medicare and Medicaid, then-actor Ronald Reagan traveled the country as a spokesman for the American Medical Association, warning of the danger the legislation posed to the nation. “Behind it will come other federal programs that will invade every area of freedom as we have known it in this country,” he said in one widely distributed speech. “Until one day … you and I are going to spend our sunset years telling our children and our children’s children what it once was like in America when men were free.”

Reagan set the tone for a conservative war against Medicaid that is now in its 52nd year. Recent congressional proposals to repeal and replace the Affordable Care Act would have reduced Medicaid enrollment by up to 15 million people, and, despite being defeated, congressional Republicans aren’t done yet: It’s likely they will attempt to gut the program during the upcoming budget debate. Meanwhile, more than half a dozen conservative governors are trying to take a hatchet to the program—at the open invitation of the Trump administration—through a vehicle known as a “Medicaid waiver.”

Waivers are intended for state pilot projects designed to improve health care coverage for vulnerable populations. But that’s not what conservative governors are pursuing. In Maine, for example, as citizens prepare to vote on a referendum that would force the state to expand Medicaid to 70,000 people, Gov. Paul LePage (R) is moving in the opposite direction. His Department of Health and Human Services has requested permission to create a 20-hour-a-week work requirement, impose co-pays and premiums, and implement a $5,000 asset cap on Medicaid beneficiaries. The result, health care experts warn, will be that low-income people in Maine will be kicked off the program.

LePage’s administration argues that the work requirement will help people earn more and become more self-sufficient. But according to Hannah Katch, a senior policy analyst at the Center on Budget and Policy Priorities and a former administrator of the California Medicaid program, 80 percent of Medicaid patients nationwide are already in working families. “The vast majority of people who aren’t working are either taking care of a family member, have a physical or behavioral health condition, or are in school, or have a combination of these factors,” said Katch. “While a work requirement is unlikely to help them get a job, it is very likely to take away health coverage from people who can’t work.”

While Maine’s application specifies categories of exemptions for the work requirement—including for individuals receiving treatment in a residential substance abuse program, caring for a child under age 6, or who are “physically or mentally unable to work”—Katch said that the exemptions are likely to be difficult to obtain. “The burden could fall on an individual to prove their exemption,” she said. “If a person is low-income and has a disability, or a substance abuse disorder, or has young children—proving an exemption in a specified time period with the proper and often extensive documentation can be really difficult.” As a result, Maine’s work requirement would likely result in a much broader population being kicked off of assistance than intended—or at least than explicitly intended. (Maine Department of Health and Human Services did not respond to requests for comment.)

Of equal concern is the people who likely wouldn’t qualify for an exemption under Maine’s proposal. Previously, the state allowed a limited Medicaid expansion for women with low incomes who need family planning services, and for people who are HIV-positive. Katch said that these are two of the groups who could be deemed “able-bodied” and required to work for their coverage—people who clearly need consistent access to their medications. (Low-income parents and young adults aging out of the foster care system are also of particular concern.)

That seems to be LePage’s ultimate goal: forcing people out of the program.

Direct service providers in Maine share Katch’s apprehension. Kara Hay is CEO and president of Penquis community action agency, which serves approximately 17,000 people annually through 80 programs across the state, including Head Start and child care, legal aid, housing, transportation, business training and financial support, health care assistance, and more. Hay said that the state’s waiver request “is not new, innovative, or designed to deliver care more efficiently” to low-income people, as waivers are supposed to be. In addition to a work requirement that offers no access to transportation, child care, or training—common barriers experienced by her agency’s clients—Hay takes issue with the state’s proposal to force people with little to no money to pay co-pays and premiums, and to deny coverage to people with $5,000 or more in assets. Maine used asset tests for public assistance programs for 40 years and they were “complicated to administer, devilishly inefficient, and problematic to document,” Hay said. “They often cause people who would be eligible to give up during the application process.”

That seems to be LePage’s ultimate goal: forcing people out of the program.

Another problem with Maine’s proposal is that with far fewer people having Medicaid coverage, the costs of caring for the uninsured will fall on “rural hospitals and providers—who are the least capable of absorbing these additional costs,” Hay said. “It unintentionally sets up the foundation for a collapse in rural health care. It’s a recipe for escalating rural decay.”

Maine is not the only state trying to tighten its Medicaid requirements. Wisconsin, Kentucky, Utah, Indiana, Arizona, and Arkansas have requested similar waivers. Health and Human Services Secretary Tom Price and the administrator of the Centers for Medicare and Medicaid Services, Seema Verma, have made clear that waivers granted to one state will be an option for other states. That means that for now, the front lines in the conservative war on Medicaid are in the states, where the fight might be a little quieter than in Washington, but equally dangerous.